South By North Strategies, Ltd.

Fed Watch is not encouraged by the economic policy ideas heard coming from Washington.

Bottom Line:  Bernanke’s speech struck me as anything but reassuring.  He made it clear that the Fed’s remaining options were weak and/or less than palatable for policymakers.  With such low ammunition, how can we take seriously his conviction that the Fed will aggressively defend against the threat of deflation that is already upon us?  Simply wait around for the fiscal policy backstop?  Don’t hold your breath – this Administration is about to be on the run; they have already dropped the policy ball, and there will not be a second chance.   We already had a lost decade, and another is upon us.